The International Monetary Fund (IMF) has said Nigeria's currency, the naira, is showing signs of stability.

This, it said, is due to recent interest rate hikes and the clearing of foreign exchange backlogs by the Central Bank of Nigeria (CBN).

The IMF made this known during a press briefing in Washington DC on Tuesday.

"In Nigeria, rate hikes and the clearing of overdue domestic central bank foreign exchange obligations have helped the naira show more signs of stability," the IMF stated in its report.

Tobias Adrian, the IMF's financial counsellor and director of monetary and capital markets, while spematat the conference, acknowledged the efforts of the CBN in controlling inflation and stabilising the foreign exchange market.

"The central bank has been transitioning to an inflation-targeting regime and has liberalised the exchange rate, which we welcome," he said.

"The rate hikes implemented so far have been appropriate, especially given the challenges posed by high inflation, which still stands around 30 percent."

Despite the recent gains in naira stability, the currency has struggled in 2024.

On October 16, the World Bank reported that the naira remains one of the worst-performing currencies in sub-Saharan Africa.

The report said the continued increase in the demand for dollars and limited dollar inflow is responsible for Naira depreciation in the last months.

However, the IMF noted that the currency has shown signs of improvement in recent months, fluctuating between N1,700 and N1,600 per dollar in the parallel market and stabilizing between N1,500 and N1,600 in official trading windows.